Bitcoin Prices Rocket Upward As New York Considers Regulation

Regulators in New York have announced a series of hearings to consider whether the bitcoin should be regulated. The New York State Department of Financial Services made the announcement via its website today. The agency has been investigating regulatory guidelines for virtual currencies like the bitcoin since August.

Business Insider was one of the first to spot today’s press release from New York’s DFS.

NY regulators to consider bitcoin licenses

One of the topics that will be discussed in the hearings in New York state is whether regulators should hand out what they call BitLicenses. The licenses would be given to businesses which regulators decide are complying with new laws regarding digital currencies, including the bitcoin.

Regulators will also be considering “the interconnection between money transmission regulations and virtual currencies.” Their hearings will consider questions like what types of transactions and activities would require a license and whether companies which receive a BitLicense will be required to abide by guidelines which protect against money laundering and protect consumers.

Why regulators are concerned about bitcoins

One of the biggest attractions to bitcoin use is the fact that they are unregulated right now, and this is precisely why New York regulators are looking to slap some regulations on the virtual currency. The DFS said in its notice that it was concerned about the “cloak of anonymity” of bitcoins and worried about whether they “support dangerous criminal activity, such as drug smuggling, money laundering, gun running and child pornography.”

The agency referenced the now-defunct Silk Road, which U.S. officials shut down recently because it provided a marketplace for illicit drugs and other illegal items. In an interview with a magazine, the now former operator of the website said bitcoins were one of the most important ingredients in their efforts to “commit illegal acts.”

The New York regulators then went on to explain that there plenty of good things bitcoins could be used for, like “the facilitation of financial transactions.” They also said they will consider putting guidelines in place to ensure that the virtual currency is used only for good instead of for illegal activity.

Bitcoin prices surge again

Bitcoin prices continued to soar again today on Mt. Gox, one of the most well-known bitcoin exchange sites, pushing up almost to $450, which is a new high for the digital currency. The value of these strings of numbers has been rocketing upward for most of the year after a few minor setbacks with Mt. Gox and Silk Road. Meanwhile well-known investors like the Winklevoss twins continue to tout the digital currency. They believe a bitcoin should actually be worth about $40,000.